Tesla not alone in quest for 35K mid-market luxury EV that goes 200 miles

Tesla’s not the only one working on the dreamed mid-market luxury EV that goes 200 miles and costs $30,000. The Wall Street Journal reports that GM says it’s developing a vehicle even if battery costs currently remain too high to pull this off. The story notes:

Kevin Gallagher, a chemist and researcher at the Department of Energy’s Argonne National Laboratory, said auto makers are spending about $500 a kilowatt hour on battery packs. That means the 24 kwh pack on the Nissan Leaf would cost around $12,000. Last year, Ford CEO Alan Mulally said the battery on the Focus EV with 23 kwh of energy costs between $13,000 and $15,000.

Tesla gets around these battery costs by using commodity batteries that it packages. It’s ones of Tesla’s biggest insights into cost reduction. The fact that Tesla has chosen not to engineer and build all of the parts in the Model S, but find cheaper off the shelf solutions is one of the reasons the company is succeeding.

The article notes Tesla is expecting a 20 percent increase in energy density in the next four years and founder Elon Musk has said “it didn’t require a miracle” to sell a 200 mile-range EV at 35K. While Tesla had penciled in 2015 as a target date in the past, it’s increasingly looking more like 2016-2017 for the mass market EV. Which means in the meantime, a significant driver of Tesla’s stock performance over the next few year will be how well the Model X, Tesla’s SUV performs, and how much sales of the Model S grow.